1. Field of the Invention
The present invention generally relates to automated auction systems and methods, and more particularly to an automated auction system for use in buyer/supplier procurement processes.
2. Description of the Related Art
Customarily, buyers request bids on various types of products or services from suppliers. For example, companies routinely provide their suppliers with public and directed requests for information (RFI), requests for quotations (RFQ), and requests for proposals (RFP). In an effort to provide the requested information, companies often utilize web-based systems such as International Business Machine's Internet Quoting Tool (IQT), available from IBM, Armonk, N.Y., USA. Once the buyer receives all of the information, quotations, and/or proposals (i.e., bids) from the suppliers, the buyer analyzes the various bids to determine which supplier to select.
For example, IBM's IQT system provides the following. It provides a company's ability to respond to business opportunities by making relevant requests for products and services more visible. It provides an effective tool to create responses. Also, it brings web-based efficiency to the procurement process.
Specifically, the current IBM IQT system reduces administrative costs and cycle times because it eliminates the need to use conventional communication tools such as mailing or faxing. Furthermore, because buyers (companies) make more detailed and concise requests, the supplier knows exactly what the buyer (company) is asking and, consequently, the response is clearer and more accurate.
Generally, in a procurement process, a supplier is an entity responsible for providing quotations for products and/or services requested by a buyer. A buyer generates requests and evaluates responses to identify the most competitive supplier(s) to provide specific products or services. A request is a document created by a buyer for procuring products and/or services. The request is either in the form of a Request for Quote (RFQ), Request for Proposal (RFP), or a Request for Information (RFI). A response is an answer provided by a supplier to a request for products and/or services from a buyer.
A Request for Quote is a type of request whereby the buyer has the intention to award the work after completing the evaluation process. Usually, this type of request requires a standard response from the supplier(s) such as pricing and delivery information. Similarly, a Request for Proposal is a type of request whereby the buyer has the intention to award the work after completing the evaluation process. Usually, this type of request is more complex than an RFQ and requires more detailed information of the supplier(s) other than just pricing and delivery information. However, a Request for Information is a type of request whereby the buyer has no intention to award the work after completing the evaluation process. This type of request is usually for information gathering, market intelligence, and benchmarking.
Furthermore, there are two broad categories of requests, directed and public. A directed request is a request that is posted to specific companies to review or respond to, whereas a public request is a request that is posted to any and all suppliers. For example, public requests are posted on the Public Requests page on IBM's IQT web-based system. In the IQT system, a supplier does not have to be registered with the IQT to view a public request, but the supplier must be registered to respond.
The concept of receiving bids from suppliers is well-known in business. It is also known that reviewing each bid and comparing them against other bids often results in unnecessary increases in cycle times and administrative costs. Thus, it is critical that a structured methodology become available to aid professionals in reducing cycle times and administrative costs, as well as achieving other efficiencies in the procurement process.
While the conventional IQT process provides a valuable system of providing and gathering information, and consolidating requests for buyers, there remains a need for a new automated system which can be used in conjunction with the current IQT processes and which provides an auction methodology to be used during RFQ, RFP, or RFI processes.